Operating_Model_slides

8/7/2019 Operating_Model_slides

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Copyright 2009 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

Breakout Session: Operating ModelDavid MetnickRandall Wozniak

Copyright 2010 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.


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Agenda

2Copyright 2010 Accenture All Rights Reserved.

Operating Model Benefits and Rationale

Risks of not having an Operating Model

Value Progression of an Operating Model

Operating Model Components

Metrics

Process Technology

Infrastructure

Organization

People

When to Develop the Operating Model

Case Study:

Business Situation Establishing the Operating Model

Enabling Key differentiators

Establishing Governance

Service Management

Relationship Management

Performance Management

Service Delivery


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Operating Model Benefits and Rationale


Benefit Rationale

Ensures alignment of allorganizational units to a commonvision

Helps align stakeholder interests toward achieving a common set of target business benefits

Provides a basis for deciding key issues

Facilitates a consensus on what is important about how the Shared Services organization works

Educates stakeholders on how service delivery will be achieved via changes related to process, people,and technology

Helps increase speed to transform Reduces the time & cost to complete the program, thereby realizing the benefits more swiftly

Provides an authoritative source to guide all process designs

Allows process designers to consider each process within a larger context

Helps minimize the cost to transform by expediting process design and minimizing the chance ofrework thereby allowing the client to realize transformation benefits earlier

Facilitates training and communication of personnel by providing an easy to understand framework

Clarifies operational responsibilities(both internal & external)

Provides an authoritative basis for communicating what business units/corporate/SSC areresponsible for

Documents interaction rules of engagement between organizational units (both internal & external)

Enables impact of transformationdecisions to be easily identified

Shows the impacts to the interactions, processes, and organizational units when changes areplanned or undertaken

Provides a consistent overall modelfor performance measurement

Enables performance measurements to be performed both per capability area and end-to-end acrossthe whole operating model

Provides a consistent framework by which to evaluate the performance of different operational groups.


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Risks of not having an Operating Model


Risk Description

Design of SSC without a common vision SSC process, organization, technology designs created without guidance from an overarchingvision and model

Stakeholders are not fully aligned

Process designers are creating designs without considering the larger context

Training and communication of personnel are not unified with a common framework Annual SSC strategies and decisions are not based on a unified operating model

Unclear division of operational roles andresponsibilities

Operational roles and responsibilities are not clearly defined as they relate to governance andprocess

External stakeholders (business units) may not have an authoritative basis or for interacting withthe SSC

Future transformation, process ortechnology decisions for SSC would nothave a unified operating model to basedecisions on

Key decisions are made without a comprehensive model to consider

Decision-making takes longer since all components of the SSC must be considered without a

comprehensive model or document to refer to Changes to the SSC would have to be documented in many locations without a clearunderstanding of the overall impact to SSC

New business units and functions are brought into the SSC scope of work without a unifiedmodel to guide the transition

Performance measurement is based oneach process or service without consideringthe overall SSC model

Performance measurements are performed at a micro level without also considering the macrolevel. The performance measurements for each capability are not tied to the end to endperformance metrics.

The various operational groups are not measured through a consistent framework.


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Value Progression of Operating Model


Value

Formalization and execution of the Operating Model

Process Efficiency Increased Effectiveness Improved Controls

Value-Added Reporting Accurate, Consistent, and

Measurable Services

Responsive Service Delivery Effective Continuous Improvement

Insight-Driven Decision-Making

Reduce Cost

Improve Insight

Proactively Manage Service


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Operating Model Components


Mission, Vision, Shared Values, & Core Competencies

Results Achieved

CultureThe shared set of assumptions, beliefs, values,understandings and meanings that guide perceptions,judgments, and behaviors

Operating Model Components: The organizationallevers that individually, and as a collective group,directly influence the degree to which the SSC canachieve high performance

MetricsThe measurements which drive the performance ofthe SSC, teams, and people

ProcessThe end-to-end activities that produce measurableoutputs

TechnologyThe tools, both enabling and applications, that arecritical to business success

InfrastructureThe physical location, facility, and the associatedtangible assets

OrganizationThe structure and associated governance model thatinfluences how the SSC should operate, includingthe roles, responsibilities, and reporting relationships

PeopleThe profile of the SSC employees including allcompetencies (i.e., Core, Technical, and

Professional)

Culture

Technology

Process

Organization

People

Infrastructure

SharedServices

Metrics

Execution

Alignment

Operating Model


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Operating Model - Metrics


KPIs are aligned from top-downIdentifying StrategicObjectives and Critical Success Factors facilitated

quantification of a qualitative Mission statement.

Process KPIs tailored forbusiness processes

Process KPIs mappedagainst high-level businessprocesses to ensure end-to-end process,

Activities and customerdependencies are measuredsufficiently.

Utilization of measurements in all operational activities linkedback to the mission, vision, and values is foundational in aShared Services model.

Ohio Shared Services

executes financialtransactions for its customerswhile skillfully balancingefficiency and customerservice to add value throughlower cost and improvedeffectiveness. Our primarykey to success is a h ighlymotivated, top performing,self directed workforce.

Cost CompetitiveService Provider

Rigorous cost management

OSS Mission Strategic Objectives

OSS MissionStrategic

ObjectivesCritical Success

FactorsOrganizational

KPIs

OSS Cost (by process, agen cy, etc) Agency Savings ($) OSS Budgeting Accuracy %

(Cost/ISTV)

Organizational KPIs

Associate Satisfaction % Transaction al Volume / FTE Managed/un-managed turnover %

% SLA Targets Met Partner Satisfaction %

Satisfied OSS Associates Highly productive workforce

Focused continuousimprovement

Standardized high qualityservices

Excellent Customer Service Adherence to service level

agreements Maintain credibility with

Partners

Highly Motivated andTop Perfo rmingWorkforce

Efficient and EffectiveOperations

Excellent Value andService to Customers

Critical Success Factors

CI Project Savings ($)

MissionStrategic

ObjectivesCritical

SuccessFactors

OrganizationalKPIs


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Operating Model - Processes


Develop a process inventory

The standardization of business processes is a critical enabler ofthe Shared Services business case.

Take an end-to-end view, even if the entireprocess will not reside within the Shared Services

Involve your users and customers ERP

Understand the interdependencies

Create TravelAuthorization

(TA)

SubmitExpenseReports

(ER)

SubmitReceipts

Pre-Audit

SupervisorRe-Approval

EmployeeTravels

EFT

2

Correct &resubmit

#End to End/

OSS/ Agency Potential Measurement

1 Agency Avg.timefr omtravel completionto ER submittal

2AgencyAgency

% of ERs requiring re-approval #of TAsaged over 5 days in approvalworklist

3

OSSETE

AgencyOSS

T&EReimbursements Processedper OSSFTE % of T&Ereimbursements preaudited % of envelopeswithout bar codecoverpage #of T&Eimageexceptions

4AgencyAgency

Avg. timefrom travel completionto OSSreceipt scanning % of ERs submitted within90days of completedtravel

5

ETEETE

Agency

AgencyAgency

OSS

% of ERs pre-audited % of pre-auditsfailed % of pre-auditsfailed duet o incorrect receipt submissions

Avg. timeto resolve T&Epre-audit error (incl. in T&EexceptionKPI)

Avg. number of pre-audit submissions Avg. timefrom scanningat OSSto being pre-audited

for ER 20% oforiginalTA)

Send back totraveler viaworkflow

Fail

Pass

3

BudgetCheck

Pass

Agencyadjusts ERcoding as necessar yIf Budget Check is failed

and/oruntil 5day Pay CycleHoldingperiodis complete

5Day Pay CycleHoldingPeriod

9Fail

IndividualKPIs- T&E Teams

T&E qualityassurance

Pre-auditsprocessed

Avg. time to pre-audit ER

SupervisorApproves

TA

OAKS OAKS OAKS

OAKS

UDS

OAKSOAKS

OAKS OAKS

OAKS

4

7

8

16

Process

Flows

ERP BusinessRequirements

EnablingTechnology

Requirements

OrganizationDesign / Capacity

Modeling

ServiceManagementFramework

ChangeManagement

Strategy


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Operating Model - Technologies


Technology plays an integral role in achieving the desired processstandardization and efficiency in the Shared Services model.

Enable organizational consolidation into theShared Services model

Facilitates efficient and measurable customerinteraction

Enables efficient and effective servicemanagement

Exploits the ERP platform

Provides business intelligence to enable processand operational excellence

Enables efficient and effective services delivery

Sustains beyond original business case benefits

Workflow

SME 170 Solutions

eAI

SeeBeyond (eGate)

Scanning & Archives

Open Text

Call Distribution

Integrated with PBX

Demographic Data

PeopleSoft HR CDDB

Travel & Entertainment

Concur Expense

Change Control

Merant PVCS

Procurement

Ariba

Information Delivery/Reporting

Core ERP/Best ofBreed Tool

CoreERP

egSAP, Oracle,PeopleSoft

SupplierWebPortal

EmployeeWebPortal


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Operating Model - Infrastructure


Determination of the location and build out of the facility is complex andmust be integrated with the overall Shared Services Planning.

Selection of Location and Site

Build out/ Transformation of Facility

Acquisition of Physical Assets


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Operating Model - Organization


The structure for Governance and organization of work beingpreformed in the Shared Service Center must account for allmanagement processes.

Governance

Leadership and Organization

Reporting Relationships

Roles and Responsibilities


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Operating Model - People


Establishing employee profiles that account for skill sets as well ascharacteristics and behaviors generate the desired culture.

Placement within the Organizational Structure

Right Skills and Experiences

Right Characteristics and Behaviors

Position Profiles

DM

Establishing employee profiles that account fors kill sets as well ascharacteristics and behaviors generate the desired culture.

role and responsibilityprofiles

Skills AssessmentScorecard

OrganizationalChart Placementwithin the OrganizationalStructure

RightSkills and Experiences

RightCharacteristicsand Behaviors

Ohio Shared ServicesLead

CustomerServiceLead

Bu s.Op s&Process

Excellence Lead

Finance Lead

Process& ClientIntegration Lead

Cont.Improv.Analyst

OBM

InformationTechnology

Communications

ServMgt.Ana lyst

Requirements&Config.

Management

Coaches

1

1 11

1

1

1

1

7/1/09 7/1/09 7/1/09

7/1/09

7/1/09

7/1/09

7/1/09

7/1/09

Coaches

10/1/094 3

OSS

OBMon-site

Key

SDWT#1

SDWT#2

SDWT#3

SDWT#4

9 7/1/09

7/1/09 7/1/099

9

7

7/1/09

SDWT#6

SDWT#7

SDWT#5

9 10

10

9/1/09 10/1/09

10/1/09

7/1/09

Go LiveDate1

# ofFTEs

7/1/09

Cont.Improv.

Analyst

1 10/1/09

AdministrativeSupport

1 7/1/09

OBMoff-site

OtherOrg.

6Total:5Leads;1Admin

6Total:4Coaches;2Analysts(2OBM

positionson-s

iteandfouroff-s

ite)

43Associates

HR Support*

FacilitySupport

Fiscal Support

1 7/1/09

1 7/1/09

1 7/1/09

1 7 /1 / 09

Training

1 7/1/09

Service

CenterLead


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Operating Model Components - Summary


It is best to design all components initially rather than attempting to piece meal each.

The model gains the most value by having each area well thought out, only definingone or two components eventually drives the need for the rest.

Some components can be designed in parallel, others should be build upon oneanother.

Model is designed in an integrated fashion consistent with the overall all SharedServices vision and strategic objectives.

Each component should account for how Shared Services will be positioned in theorganization (single function vs. multi-function).

The technologies component will determine the high-level application and technicalarchitecture.


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Note: = Operating Model related activities in the overall deployment approach.

When to Develop the Operating Model


Strategic Intent andVision

Scope of SharedServices

Fit with Other ChangeInitiatives

Current State Analysis /OpportunityAssessment

Shared ServicesOperating Model Change Management

Requirements Gather Application /

TechnologyRequirements

Cost / Benefit Analysis

Organization andProcess Design

Training Design Service Mgmt

Framework Design Workforce Transition

Planning Application / Technical

Design Site Selection Shared Service Center

Facility Design Roll-out Strategy Business Case

Validation

Application /Technology Build

Shared Service CenterBuild Shared Services

Organization Build Detailed Roll-out Plans Application /

Technology Test Training Build and

Delivery

Phase IStrategy & Planning

Phase IIDesign

Phase IIIBuild and Test

10 Weeks

Typically 3-5 Months

Typically 3-6 Months(Depending on Tech. Needs)

Program, Migration, and Journey Management

Management Checkpoint

Phase IV

Deployment

Quick Wins

TBD Based on Approach

=

Execution of Deployment Plan Deploy Applications /

Technologies Training and Work Shadowing Workforce Transition

Shared Services Deployment Approach


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Case Study:Business Situation


New Administration

Budget: revenues not keeping pace withexpenses

Aging workforce 14% eligible to retire in 2011

33% eligible to retire in 2014

Pre-historic business processes supported bypolicy and legislation

Assessment results

Inefficient leverage of technology Inefficient process cycle times

75% of finance resources focused ontransaction processing

Travel reimbursement processing costs:$37/T&E report

AP vendor invoice processing costs:

$29/invoice

Build and operate Shared Services Center

Separate back-office from programs

Gain union buy-in of a high performance

workplace

Reorganize and restructure agency operations

Implement new cash management strategies& controls

Manage staff headcount reduce positions through

Attrition Unfilled vacancies

Develop and execute equipment control policies

Current State Response


16/23

Case Study:Establishing the Operating Model

Copyright 2010 Accenture All Rights Reserved. 16

Governance to servethe customer in thebest possible ways

ManagementProcesses to focuson customerconcerns

Service Deliveryreducing stepsand handoffs

Use of technologyto increase self-service andreduce manualprocessing

The team Developed an Operating Model with customer servicefirst in mind.


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Case Study:Enabling Key Differentiators

17Copyright 2009 Accenture All Rights Reserved. 17

New ways of interacting and providing service materialized in five areas.

The Operating Model became a 3-dimentional

multi-component and sub component framework.

Service Delivery

Refined processeswith embeddedmeasurements toensure servicelevels and accuracytargets

ServiceManagement

Defined activitiesdriving high-performing, serviceoriented operations

Governance

An enhanced levelof interaction notpreviously usedacross agencies

PerformanceManagement

Tracking of qualityand accuracy at thecenter, team, andindividual levels withdaily, weekly, monthlyand quarterlyfrequency

RelationshipManagement

Detailed peerassignments atstrategic and tacticallevels, includeddetailed discussionplans and frequencyfor engagement


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Case Study:Enabling Service Management


The OSS Operating C ycle ensures service delivery is proactively managed to Agency partner expectations. ServiceManagement focuses on the tools necessary to support the initial phases of this cycle in cludin g Service Definition (ServiceCatalog, SLA), Performance Measuremen t (KPIs), Performance Reporting (Scorecards), and Intra-state Transfer Vou cher.

Service LevelAgreement

PerformanceMeasurement

Organizational, Process,and Individual KPIs

PerformanceReporting

Balanced Scorecard, SLAScorecard

Service ReviewRelationship ManagementCFO Council, AgencyInteraction Monitoring

Service DefinitionService Catalog, SLA

Advisory

The OSS Operating Cyclebegins with definition of servicesprovided through the OSSService Level Agreement andService Catalog, and areessential to setting appropriateexpectations for OSS serviceswith Agency partners.

With expectations clearlyunderstood, Shared Services willmeasure performance of servicesagainst commitments and KPIsagreed upon in the SLA. TheseKPIs will be reported to keystakeholders in various Reportsincluding the OSS BalancedScorecard and SLA Scorecard.

Using performanc e reporting output OSS willproactively review service delivery to ensure thatpartner expectations are met or exceeded andcosts allocated through Advisory are understoodand reasonable. This will be the primary focus ofthe Relationship Management Process.

Performance Measurement

Service Definitions

Service Level Agreements

Service Review

Performance Reporting

A detailed plan for delivering service sets expectations for what service willlook, feel and sound like as well as the service will be measured.


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Case Study:Relationship Management


Relationship Management provided a structure for Service Reviewactivities in the Operating Cycle.

Tactical level interaction - day-to-day with outsideagencies/ departments

Strategic level interaction - periodic with CFOs andother key stakeholders

Service Level

Agreement

PerformanceMeasurement

Organizational, Process,and Individual KPIs

Performance

ReportingBalanced Scorecard, SLA

Scorecard

Service ReviewRelationship Management CFO Council, Agency

Interaction Monitoring

Service DefinitionService Catalog, SLA

ISTV

Plan

Measure

Assess Execute

Plan (and Revise) Relationship

Management Strategy, including: keycontact points, objectives, and tools

Communicate Partnersatisfaction outcomes

and address issueareas

Establish contact,

communicate SharedServices messages,develop relationship,

and foster partnership

Measure Partner

Satisfaction

Service ReviewRelationship Management CFO Council, Agency

Interaction Monitoring

Plan (and Revise) Relationship ManagementStrategy including: RM design (objectives, roles/responsibilities, process flows) meeting/ callschedules, key contacts (key client contactmatrix), other tools, etc


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Case Study:Enabling Performance Management

21

Performance is an underlying aspect of every process andmeasurement at the individual, team, and center level, this conceptadded greater accountability.

ServiceManagement

Shared Services PerformanceManagement

Individual PerformanceEvaluation

Service LevelAgreement (SLA)

Service Catalog

Chargebackmethodology

KPI Selection

ExternalReporting(BalancedScorecard, SLAScorecard)

Internal Scorecards

OperationalReporting

Daily/weekly/monthly/ yearly reportingand managementrhythms

Key ReportingControls

IndividualScorecard

IndividualOperationalMetrics

Formal and informalperformancefeedback

PerformanceImprovement Plans

Skill blocks and CoreCompetencies

8am 10am 12pm 2pm 4pm

PopulateDaily

Scorecard for

previous dayperformance

Review Daily Scorecard performanceand determine action plans

ServiceMgmt.

Run Operational Reports and communicate key performance statistics with team as appropriate(whiteboards,signs,live reporting views,etc.)

TE/AP/VM/CC Coach/Team Lead

TE/AP/VM/CC Coach/Lead

9AM Service Mgmtsends Daily Scorecard

pre-read


22/23

Case Study:Enabling Service Delivery


Service was structured to account for customer uniqueness's, paths ofinteraction, coverage by staff, information necessary to service, and skillsets required.

Customer expectations by segment and channel

Staff coverage

Systems and skills required

Desired CustomerExperience


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Final Thoughts

23Copyright 2010 Accenture All Rights Reserved

The Operating Model cannot be developed as a single version by an isolated team. It must be aniterative process with input from the organizations key representatives. This ensures buy-in andwill identify issues that will be resolved before moving on to the overall Design phase.

The Operating Model should consist of a high-level description of the Shared Services solutionwhich summarizes the new organization, the scope of services, and how it will interact with the

operating units, customers, suppliers, and other third parties. It should be targeted at a board-level audience and clearly define how the to be differs from the current model.

The key influences on the Operating Model design will come from the Shared Services vision andstrategic objectives. The vision and strategic objectives will have been developed with significantinput and direction from senior leadership. The Model should clearly make the link to theorganizations objectives.

The Operating Model should be a holistic view of the new organization. It is intended to berelatively high-level. This is of particular relevance to the development of the process model. It isnot advised to develop detailed process and application designs, while issues associated with theorganization, service management, etc. have not been sufficiently explored.

The Operating Model creates the basis for the Business Case and Implementation Plan. If theOperating Model goes to a level of detail that does not increase the level of confidence in those

deliverables, work will have prematurely extended into the Design phase.

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